|Topic:||Making sense of NFV – will it deliver on expectations?|
|Title:||Founder & VP Marketing|
Jennifer Kyriakakis, Founder & VP Marketing at MATRIXX
Jennifer Kyriakakis has been working in the Communications Industry for over 18 years in Marketing, Sales and Systems Delivery. Prior to MATRIXX, Jennifer worked for Portal Software (acquired by Oracle) where she was responsible for the global marketing strategy of Portal’s product suite for the broadband and mobile markets. Before joining Portal, she worked with Verizon International Wireless managing large implementations of billing and customer care solutions for their global operating partners. Jennifer began her career in the Communications Practice at Accenture where she developed billing, invoicing, and payment processing applications for wireless operators. She holds a degree in Information Technology and Operations Management from the College of William and Mary.
For years the enterprise has been realigning entire IT ecosystems to take advantage of cloud technologies. Telecoms service providers are now envisaging similar benefits through Network Functions Virtualisation (NFV). The reality is that while changes are in the wind they might not be as imminent, or as transformative, as many seem to think. Operators want to be able to use off-the-shelf hardware for all IT and network functions. They welcome any development that enables them to break free from the shackles of legacy infrastructures – which can be cumbersome, expensive, and difficult to realign for next generation, data-hungry services such as LTE. They also need to develop greater real-time abilities for billing and charging. The article will discuss the predicament CSPs face as costs spiral due to growing data volumes and inefficient hardware utilization, and how virtualization of some network functions require careful consideration.
Dispelling the NFV myth
The migration to LTE is bringing fundamental changes to the industry. Mobile users have become data consumers; smartphone and tablet adoption has changed behaviours forever. Mobile subscribers now spend their time browsing the Web, streaming video and accessing OTT services and applications, rather than using their device to make regular calls and send text messages. This is not to say that voice is a dead technology, but it is being redesigned for an LTE world. The first wave of VoLTE deployments have been announced with HD voice applications also in the pipeline.
These digital applications will redefine mobile services, bringing them more in line with end-user expectations. However, as these services become standardized, operators will need to find ways to be creative in the marketing and pricing of services if they are going to differentiate in a highly competitive marketplace. Meanwhile, with the network and IT systems that support these services, another evolution is taking place that tracks the need for Communications Service Providers (CSPs) to develop a better way to operate everything.
Network Functions Virtualization (NFV) is seemingly the latest craze for CSPs looking to simplify the administration of network functions currently run by physical equipment. They’re aiming to take advantage of commoditized hardware as the springboard to virtualize network functions and at the same time, derive greater technical and financial efficiencies. CSPs can reduce the effort to configure and manage networks, minimize configuration and provisioning errors, and make it easier to administer growing networks with fewer systems and people, by running many functions on virtual machines that do not require dedicated or proprietary hardware for each function.
It’s a promising move if CSPs are careful to map out a NFV strategy that takes account of several issues that arise as real-time technologies are virtualized.
One such issue is that there are some functions that straddle the network and IT domains, so if – and how – to virtualize them is not as straightforward. While most IT applications are relatively straightforward to virtualize – and are being virtualized today as a matter of course by enterprises eager to optimize – it is still early days for NFV. So when considering functions such as real-time charging and billing, and to some extent policy management, as the two converge, it’s important to ask what does virtualization look like?
Real-time charging and NFV
Real-time charging (RTC), or any Online Charging System (OCS) as defined by the 3GPP, is one of the very few applications that touches both the network and IT systems within CSPs. RTC is of vital importance to CSP businesses because it tracks usage, and therefore revenue. It is directly connected to the network and in the control path. However it also updates customer balances and impacts financial IT systems: it’s an intermediary that at a basic level determines how much a consumer should be charged for a certain amount of network usage. This is further evidenced by the fact that in some organizations RTC is owned by the Networks group and in others by the IT group. More and more, it is jointly owned by Network, IT and even Marketing as it is the lynchpin to establishing how services are monetized.
One of the biggest expectations of NFV is the more efficient utilization of server hardware resources. As traffic volumes continue to rise – charging and policy have been primary targets for NFV initiatives as these applications are classically run on proprietary hardware and very expensive to scale out. So by virtualizing them, CSPs anticipate being able to use commodity hardware to support growing traffic volumes and more extreme deltas between peak and non-peak traffic loads.
For any application that efficiently utilizes hardware capacity and requires less processing power and resources than a commodity server provides, then sharing physical hardware will yield benefits in efficiency. On the other hand, if an application is using hardware inefficiently, virtualization will not result in the efficiency gains needed to keep up with traffic growth. Most real-time applications, including charging and policy, suffer as much from their dependency on legacy database and transaction processing architectures as the fact that they also run on proprietary equipment. There are inherent architectural limitations to real-time 1.0 technology and virtualization of these systems only provides minor relief from issues with scalability and predictability. Therefore, achieving the goal is as much about modernization of real-time technology as it is about NFV.
Additionally, there are considerations around latency sensitivity and customer experience that should be carefully explored. RTC is by its nature extremely latency sensitive – it is in the path of service delivery, meaning that any issues with latency affect customer experience and ultimately revenue generation and collection. So exactly how virtualization of the application will impact latency and service delivery, needs to be closely examined. This emphasises the need to examine the fundamental underlying technology rather than depending solely on virtualization for efficiency and scalability.
NFV and the transition to becoming a Digital Service Provider
Many CSPs are asking charging and policy system vendors to run in a virtualized environment because of the need to achieve much more extreme levels of scalability without having to invest in more proprietary boxes and hardware. These CSPs wish to deploy commoditized off-the-shelf hardware and use the processing power more efficiently through virtualization of the machine. Charging and Policy Solutions that have been built on more modern IT architectures can provide the scalability required, whether virtualized or not. Virtualization will further help reduce the effort to configure and manage the systems, minimize configuration and provisioning errors, and make it easier to administer with fewer systems and people. Therefore they can gain further benefits in speed, user experience, time to market and lower costs.
To date, there have already been a number of well-publicised NFV initiatives from AT&T in the US with its Supplier Domain Program 2.0, and more recently Telefonica with its Unica programme, which promises to virtualize 30 per cent of its network infrastructure by 2016. Both operators have shown a firm commitment to NFV publicly.
However, in the specialised area of RTC, a more strategic approach seems prudent. CSPs may be using NFV as a way to streamline their IT and network operations on the way to becoming Digital Service Providers. In this new digital world, it will be more critical than ever to drive operational efficiencies and time-to-market to compete with an ever-growing number of agile over-the-top-players. While there are undoubted benefits to NFV, the virtualization of some core functions such as RTC might not be enough to get them there. CSPs should be looking at new technologies and emerging architectures to make the leaps they need for digital enablement.